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Is Big Business Buying Out the Environmental Movement?

Corporate Research E-Letter No. 65, May-June 2007

IS BIG BUSINESS BUYING OUT THE ENVIRONMENTAL MOVEMENT?

By Philip Mattera

In the business world these days, it appears that just about everything is for sale. Multi-billion-dollar deals are commonplace, and even venerable institutions such as the Wall Street Journal find themselves put into play. Yet companies are not the only things being acquired. This may turn out to be the year that big business bought a substantial part of the environmental movement.

That’s one way of interpreting the remarkable level of cooperation that is emerging between some prominent environmental groups and some of the world’s largest corporations. What was once an arena of fierce antagonism has become a veritable love fest as companies profess to be going green and get lavishly honored for doing so. Earlier this year, for instance, the World Resources Institute gave one of its “Courage to Lead” awards to the chief executive of General Electric.

Every day seems to bring another announcement from a large corporation that it is taking steps to protect the planet. IBM, informally known as Big Blue, launched its Project Big Green to help customers slash their data center energy usage. Newmont Mining Co., the world’s largest gold digger, endorsed a shareholder resolution calling for a review of its environmental impact. Home Depot introduced an Eco Options label for thousands of green products. General Motors and oil major ConocoPhillips joined the list of corporate giants that have come out in support of a mandatory ceiling on greenhouse gas emissions. Bank of America said it would invest $20 billion in sustainable projects over the next decade.

Many of the new initiatives are being pursued in direct collaboration with environmental groups. Wal-Mart is working closely with Conservation International on its efforts to cut energy usage and switch to renewable sources of power. McDonald’s has teamed up with Greenpeace to discourage deforestation caused by the growth of soybean farming in Brazil. When buyout firms Texas Pacific Group and KKR were negotiating the takeover of utility company TXU earlier this year, they asked Environmental Defense to join the talks so that the deal, which ended up including a rollback of plans for 11 new coal-fired plants, could be assured a green seal of approval.

Observing this trend, Business Week detects “a remarkable evolution in the dynamic between corporate executives and activists. Once fractious and antagonistic, it has moved toward accommodation and even mutual dependence.” The question is: who is accommodating whom? Are these developments a sign that environmental campaigns have prevailed and are setting the corporate agenda? Or have enviros been duped into endorsing what my be little more than a new wave of corporate greenwash?

AN EPIPHANY ABOUT THE ENVIRONMENT?

The first thing to keep in mind is that Corporate America’s purported embrace of environmental principles is nothing new. Something very similar happened, for example, in early 1990 around the time of the 20th anniversary of Earth Day. Fortune announced then that “trend spotters and forward thinkers agree that the Nineties will be the Earth Decade and that environmentalism will be a movement of massive worldwide force.” Business Week published a story titled “The Greening of Corporate America.”

The magazines cited a slew of large companies that were said to be embarking on significant green initiatives, among them DuPont, General Electric, McDonald’s, 3M, Union Carbide and Procter & Gamble. Corporations such as these put on their own Earth Tech environmental technology fair on the National Mall and endorsed Earth Day events and promotions.

A difference between then and now is that there was a lot more skepticism about Corporate America’s claim of having had an epiphany about the environment. It was obvious to many that business was trying to undo the damage caused by environmental disasters such as Union Carbide’s deadly Bhopal chemical leak, the Exxon Valdez oil spill in Alaska and the deterioration of the ozone layer. Activist groups charged that corporations were engaging in a bogus public relations effort which they branded “greenwash.” Greenpeace staged a protest at DuPont’s Earth Tech exhibit, leading to a number of arrests.

Misgivings about corporate environmentalism grew as it was discovered that many of the claims about green products were misleading, false or irrelevant. Mobil Chemical, for instance, was challenged for calling its new Hefty trash bags biodegradable, since that required extended exposure to light rather than their usual fate of being buried in landfills. Procter & Gamble was taken to task for labeling its Pampers and Luvs disposable diapers “compostable” when only a handful of facilities in the entire country were equipped to do such processing. Various companies bragged that their products in aerosol cans were now safe for the environment when all they had done was comply with a ban on the use of chlorofluorocarbons. Some of the self-proclaimed green producers found themselves being investigated by state attorneys general for false advertising and other offenses against the consumer.

The insistence that companies actually substantiate their claims put a damper on the entire green product movement. Yet some companies continued to see advantages in being associated with environmental principles. In one of the more brazen moves, DuPont ran TV ads in the late 1990s depicting sea lions applauding a passing oil tanker (accompanied by Beethoven’s “Ode to Joy”) to take credit for the fact that its Conoco subsidiary had begun using double hulls in its ships, conveniently failing to mention that it was one of the last oil companies to take that step.

At the same time, some companies began to infiltrate the environmental movement itself by contributing to the more moderate groups and getting spots on their boards. They also joined organizations such as CERES, which encourages green groups and corporations to endorse a common set of principles. By the early 2000s, some companies sought to depict themselves as being not merely in step with the environmental movement but at the forefront of a green transformation. British Petroleum started publicizing its investments in renewable energy and saying that its initials really stood for Beyond Petroleum—all despite the fact that its operations continued to be dominated by fossil fuels.

This paved the way for General Electric’s “ecomagination” p.r. blitz, which it pursued even while dragging its feet in the cleanup of PCB contamination in New York’s Hudson River. GE was followed by Wal-Mart, which in October 2005 sought to transform its image as a leading cause of pollution-generating sprawl by announcing a program to move toward zero waste and maximum use of renewable energy. In recent months the floodgates have opened, with more and more large companies calling for federal caps on greenhouse gas emissions. In January ten major corporations—including Alcoa, Caterpillar, DuPont and General Electric—joined with the Natural Resources Defense Council and other enviro groups in forming the U.S. Climate Action Partnership. A few months later, General Motors, arguably one of the companies that has done the most to exacerbate global warming, signed on as well.

A CAUSE FOR CELEBRATION OR DISMAY?

Today the term “greenwash” is rarely uttered, and differences in positions between corporate giants and mainstream environmental groups are increasingly difficult to discern. Everywhere one looks, enviros and executives have locked arms and are marching together to save the planet. Is this a cause for celebration or dismay?

Answering this question begins with the recognition that companies do not all enter the environmental fold in the same way. Here are some of their different paths:

Defeat. Some companies did not embrace green principles on their own—they were forced to do so after being successfully targeted by aggressive environmental campaigns. Home Depot abandoned the sale of lumber harvested in old-growth forests several years ago after being pummeled by groups such as Rainforest Action Network. Responding to similar campaign pressure, Boise Cascade also agreed to stop sourcing from endangered forests and J.P. Morgan Chase agreed to take environmental impacts into account in its international lending activities. Dell started taking computer recycling seriously only after it was pressed to do so by groups such as the Silicon Valley Toxics Coalition.

Diversion. It is apparent that Wal-Mart is using its newfound green consciousness as a means of diverting public attention away from its dismal record in other areas, especially the treatment of workers. In doing so, it hopes to peel environmentalists away from the broad anti-Wal-Mart movement. BP’s emphasis on the environment was no doubt made more urgent by the need to repair an image damaged by allegations that a 2005 refinery fire in Texas that killed 15 people was the fault of management. To varying degrees, many other companies that have jumped on the green bandwagon have sins they want to public to forget.

Opportunism. There is so much hype these days about protecting the environment that many companies are going green simply to earn more green. There are some market moves, such as Toyota’s push on hybrids, that also appear to have some environmental legitimacy. Yet there are also instances of sheer opportunism, such as the effort by Nuclear Energy Institute to depict nukes as an environmentally desirable alternative to fossil fuels. Not to mention surreal cases such as the decision by Britain’s BAE Systems to develop environmentally friendly munitions, including low-toxin rockets and lead-free bullets.

In other words, the suggestion that the new business environmentalism flows simply from a heightened concern for the planet is far from the truth. Corporations always act in their own self-interest and one way or another are always seeking to maximize profits. It used to be that they had to hide that fact. Today they flaunt it, because there is a widespread notion that eco-friendly policies are totally consistent with cutting costs and fattening the bottom line.

When GE’s “ecomagination” campaign was launched, CEO Jeffrey Immelt insisted “it’s no longer a zero-sum game—things that are good for the environment are also good for business.” This was echoed by Wal-Mart CEO Lee Scott, who said in a speech announcing his company’s green initiative that “being a good steward of the environment and in our communities, and being an efficient and profitable business, are not mutually exclusive. In fact they are one in the same.” That’s probably because Scott sees environmentalism as merely an extension of the company’s legendary penny-pinching, as glorified efficiency measures.

CHEVRON WANTS TO LEAD

Many environmental activists seem to welcome the notion of a convergence of business interests and green interests, but it all seems too good to be true. If eco-friendly policies are entirely “win-win,” then why did corporations resist them for so long? It is hard to believe that the conflict between profit maximization and environmental protection, which characterized the entire history of the ecological movement, has suddenly evaporated.

Either corporations are fooling themselves, in which case they will eventually realize there is no environmental free lunch and renege on their green promises. Or they are fooling us and are perpetrating a massive public relations hoax. A third interpretation is that companies are taking voluntary steps that are genuine but inadequate to solve the problems at hand and are mainly meant to prevent stricter, enforceable regulation.

In any event, it would behoove enviros to be more skeptical of corporate green claims and less eager to jump into bed with business. It certainly makes sense to seek specific concessions from corporations and to offer moderate praise when they comply, but activists should maintain an arm’s-length relationship to business and not see themselves as partners. After all, the real purpose of the environmental movement is not simply to make technical adjustments to the way business operates (that’s the job of consultants) but rather to push for fundamental and systemic changes.

Moreover, there is a risk that the heightened level of collaboration will undermine the justification for an independent environmental movement. Why pay dues to a green group if its agenda is virtually identical to that of GE and DuPont? Already there are hints that business views itself, not activist groups, as the real green vanguard. Chevron, for instance, has been running a series of environmental ads with the tagline “Will you join us?”

Join them? Wasn’t it Chevron and the other oil giants that played a major role in creating global warming? Wasn’t it Chevron that used the repressive regime in Nigeria to protect its environmentally destructive operations in the Niger Delta? Wasn’t it Chevron’s Texaco unit that dumped more than 18 billion gallons of toxic waste in Ecuador? And wasn’t it Chevron that was accused of systematically underpaying royalties to the federal government for natural gas extracted from the Gulf of Mexico? That is not the kind of track record that confers the mantle of environmental leadership.

In fact, we shouldn’t be joining any company’s environmental initiative. Human activists should be leading the effort to clean up the planet, and corporations should be made to follow our lead.

Violation Tracker

A database on corporate misconduct from the Corporate Research Project of Good Jobs First.